Survey: Government Faces Increasing Threat from Stolen Accounts

Fraud threats to government agencies have increased in frequency and severity during the COVID-19 pandemic, but agencies have not taken proportionate steps to respond, according to a survey released Tuesday.

According to Transunion’s Public Sector Fraud Study, more than half (53%) of nearly 600 federal, state and local agency officials said account takeover fraud—when someone other than the rightful owner commandeers legitimate accounts—had increased in the past two years. In addition, 60% of government employees said the severity of such attacks is on the rise.

However, only 41% of respondents said senior leadership prioritizes the prevention of such fraud, with only 38% reporting their IT systems are regularly assessed to prevent fraud. The survey links increased use of online services during the pandemic, including systems that disburse unemployment payments, for example—to a rise in criminals attempting to bilk the government.

“The breadth of services delivered on government websites creates complexity, and agencies face dynamic constituent and regulatory requirements to protect customers, verify identities, authenticate eligibility and secure payment transactions,” Jonathan McDonald, executive vice president and head of TransUnion’s public sector business, said in a statement. “Each agency, be it federal, state or local, has unique regulatory and fraud challenges depending on the types of e-commerce services offered. Constituents expect positive online experiences from public sector agencies as government websites form a critical backbone for constituent service delivery.”

Survey respondents indicated the largest threat to customer accounts is mobile phones. More than 6 in 10 respondents said mobile devices are the most vulnerable to account takeovers.

The survey points to government’s overall lack of investment as a key reason for why fraud is on the rise. Fewer than 4 in 10 respondents said they were happy with the security they offered. Scott Straub, TransUnion’s senior director of public sector, told Nextgov another reason is a “shift in criminal tactics.”

“The sophistication of the people executing account takeovers has increased,” Straub said. “

One potential bright spot may be the use of emerging technologies like artificial intelligence. According to the survey, 65% said AI decision-making tools and technology will improve the ability to track customers’ status and improve the security and convenience of accessing online accounts.